There’s a segment of the super-rich in Manhattan who can easily afford to buy luxury property but for a number of reasons choose to rent instead.
In a deep dive into this elite crowd, the Financial Times talked to several real estate brokers who revealed that rent can range from $25,000 to $75,000 per month, though one townhouse in SoHo was rented to a tech bro for $100,000 a month—or $1.2 million a year.
The supply of such properties surged after Michael Bloomberg rezoned areas to allow for more high rises while he was New York’s mayor. But the preference to rent instead of own was attributed to a more recent trends, according to the FT report.
A key catalyst was the exodus of people from New York to Florida since the pandemic. While they spend most of their time working remotely in the tax-free Sunshine State, they still need a place to crash in Manhattan when they visit for important meetings or events.
An extended stay at a five-star hotel would be more expensive than renting a luxury apartment. In addition, brokers told the FT that renting suggests less permanence than owning, and remote workers are eager to avoid the scrutiny of New York tax officials. Many leases are also under corporate accounts, meaning the lavish rents are tax deductible, while companies are also reluctant to own a pricey asset. One broker even suggested that renting a place on Billionaires’ Row was a good networking opportunity.
Most super-rich tenants are well behaved, brokers said. But some aren’t, and they have the financial means to try to avoid any consequences. Here are some horror stories.
“They’re very wealthy, and it’s very challenging to nail them down, as they also have the assets to fight,” Collin Bond, who runs the Fabrikant Bond team at Compass, told the FT.
He recounted one example of a tenant working in finance who was paying $30,000 a month and was evicted. The owners later discovered he had refused to pay rent in other cities and avoided court, though he was taken to court in New York and had to pay up.
But the headache didn’t end there.
“We went in to assess the damage, and found out he had literally removed walls—apparently, he’d had contractors in, and told them to rip everything up, put it in bags and carry it out,” Bond said.
Meanwhile, Julie Pham, an agent at Corcoran, told the FT that a businesswoman who was paying $50,000 per month demanded that the owner install high-tech Toto toilets. But when she moved out, the owner discovered she stole them.
Then there were these two crypto bros.
Brandon Trentham, a Compass agent, recounted an episode to the FT of “Bitcoiners” paying $55,000 a month for a furnished townhouse, where the owners had placed personal items in locked cupboards as stipulated in the lease.
But the tenants opened them up anyway, took out the items, and dumped on the curb to be picked up as trash. The owners recovered some items, but others were sold on Facebook Marketplace.
“They were crying, for all their kids’ memories, family photos,” Trentham recalled. “And when we spoke to the tenants, they had zero remorse. They were young punk kids with stupid money. And they said ‘We asked for all personal items to be taken out, and if you want to sue us, go ahead.’”
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